Adtran Launches 'Gig Communities' Initiative

HUNTSVILLE, Ala. -- Adtran is launching a national initiative around gigabit services, targeting municipalities, utility companies, and cable operators, in addition to the telco audience it has traditionally served. Focusing on the economic development benefits of high-speed Internet access and the benefits to schools and hospitals, the networking equipment maker is pledging to have 50 gigabit communities up and running this year and 200 in 2015.

Speaking to a group of analysts and press assembled here at Adtran Inc. (Nasdaq: ADTN)'s headquarters on Tuesday, Adtran VP of Global Marketing Gary Bolton said the effort would include a Gigabit Communities website with resources and case studies for interested parties to use in planning their own gigabit network effort.

Jay Wilson, SVP and general manager of Adtran's Carrier Networks Division, said the company is already working with hundreds of entities, including many of its traditional smaller telco customers, on targeted efforts to bring gigabit services via fiber-to-the-premises into communities that otherwise might struggle economically, in hopes of attracting and retaining new businesses.

The Adtran effort is not without risk. Bolton cited the positive impact that the gigabit network in Chattanooga, Tenn., has had on that area, attracting new businesses to the area and prompting concern even in Huntsville itself about the loss of potential business. The EPB Fiber Optics effort has been controversial politically, however, as larger carriers such as AT&T Inc. (NYSE: T) have fought to get laws in place in Tennessee and other states to prohibit or severely limit the ability of municipalities to build fiber networks using public money or bonds. (See Muni Utilities Take Gigabit Fight to FCC.)

"We're technology guys and that's a policy issue," Bolton said in response to a question on the possible negative response from Adtran's telco customers. "We are not weighing in on whether municipalities should be broadband providers. We believe people that have experience -- the guys who know what they are doing and are going to be in business for a long time -- should be the ones building the networks."

In many cases, he added, communities know what they are doing and shouldn't have to wait for gigabit services to come to them, but the better scenario is for communities and service providers to work together.

C Spire is one model of how that can work. The carrier, known mostly for its wireless services, is leveraging its statewide fiber optic network -- built mostly for backhaul -- to support the FTTP networks it is building in selected cities based on a competition modeled after Google Fiber's "Fiberhood" approach.

The "Get Fiber First" campaign is succeeding best in areas where the local mayors and town governments are engaged in promoting the effort, said Suzy Hays, SVP, consumer marketing, for C Spire. The campaign's goals are lofty -- no less than a statewide economic push that also intends to improve the state's oft-maligned education system and serve its hospitals and other community institutions as well.

The upside for Adtran to its Gig Communities initiative is an obvious one: The company hopes to sell much more of its networking gear, and particularly its GPON equipment, and gain some advantage over rivals such as Calix Networks Inc. (NYSE: CALX), which has been doing its own promotion on the economic benefits of FTTP, and Alcatel-Lucent (NYSE: ALU). By expanding its reach to munis, utilities and cable companies, Adtran is also hoping to create a larger customer base for the full range of its equipment. As Bolton pointed out, Adtran already sells its enterprise networking gear to the cable industry, which is rapidly growing its small business broadband services.

Munis, coops, regionals etc. can acquire the expertise (disclosure: including mine) and contract out the construction work. They may be less efficient than an incumbent. They also can support business cases that the investor-owned organizations can't.

People in the industry get too hung up on who does the build-out. The right answer is "It doesn't matter whether a cat is black or white, only that it catches mice".

Bolton statement > We believe people that have experience -- the guys who know
> what they are doing and are going to be in business for a long time
> should be the ones building the networks."
That's a lame argument by Bolton. If that is allowed no disruption would never happen. The reason we are witnessing ecommerce, car sharing, taxi ordering, cloud music, app stores, movie streaming is that guys from other industries could innovate and experiment in other industries. How can people get away with such statements!

Re: Beautiful Day in the Giga-Hood "There is one concern I have with the rush to gigabit services: If we wind up with some set of cities/towns/areas with gigabit services while others still don't have broadband at all, then we've just created a new and deeper digital divide"

And we need to keep the attention focused on price and competition. It's great if a few developments, college dorms, and high-end apartment/condos get 1 Gbps in a city, but what good does that do the rest of the city if price and availability are lacking?

Re: Beautiful Day in the Giga-Hood Yes, well that's just it. We can...and should...create these Gigabit Cities away from the Shipping, Railroad and Highway cities. The reason? We can! The rise of Cloud Jobs and Social Media means new metrics for judging a best place to live.

Look at all the expensive cities like Seattle and San Francisco. Part of the reason? They are 18th century cities based on shipping. Their downtowns are isthmuses -- surrounded by water on 3 sides! Yes, if you are a ship chandler waiting for a schooner, then these are ideal places to live...but if you want a modern house, in a low cost, yet quality suburb...then you should build your Gig City on the plains of Nebraska.

Re: Beautiful Day in the Giga-Hood I think most mayors would agree with you on that.

There is one concern I have with the rush to gigabit services: If we wind up with some set of cities/towns/areas with gigabit services while others still don't have broadband at all, then we've just created a new and deeper digital divide.

So in the rush to do gigabit services, we can't lose sight of the need to continue pushing broadband into areas that aren't served

The C spire effort made me think of this - there are rural areas of Mississippi that aren't served at all, and creating gigabit towns in that state will help those towns but not necessarily the unserved areas.

Beautiful Day in the Giga-Hood Just as ship ports created communities in the 18th century, railroads in the 19th, Interstate highways in the 20th, expect Giga-Hoods to arise whose economy is based on fast access to Cloud jobs and services.

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